Correlation Between MetalsGrove Mining and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both MetalsGrove Mining and Kip McGrath at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MetalsGrove Mining and Kip McGrath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MetalsGrove Mining and Kip McGrath Education, you can compare the effects of market volatilities on MetalsGrove Mining and Kip McGrath and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MetalsGrove Mining with a short position of Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of MetalsGrove Mining and Kip McGrath.
Diversification Opportunities for MetalsGrove Mining and Kip McGrath
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MetalsGrove and Kip is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MetalsGrove Mining and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education and MetalsGrove Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MetalsGrove Mining are associated (or correlated) with Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of MetalsGrove Mining i.e., MetalsGrove Mining and Kip McGrath go up and down completely randomly.
Pair Corralation between MetalsGrove Mining and Kip McGrath
Assuming the 90 days trading horizon MetalsGrove Mining is expected to under-perform the Kip McGrath. In addition to that, MetalsGrove Mining is 2.09 times more volatile than Kip McGrath Education. It trades about -0.13 of its total potential returns per unit of risk. Kip McGrath Education is currently generating about 0.29 per unit of volatility. If you would invest 43.00 in Kip McGrath Education on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Kip McGrath Education or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MetalsGrove Mining vs. Kip McGrath Education
Performance |
| Timeline |
| MetalsGrove Mining |
| Kip McGrath Education |
MetalsGrove Mining and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MetalsGrove Mining and Kip McGrath
The main advantage of trading using opposite MetalsGrove Mining and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MetalsGrove Mining position performs unexpectedly, Kip McGrath can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kip McGrath will offset losses from the drop in Kip McGrath's long position.| MetalsGrove Mining vs. Northern Star Resources | MetalsGrove Mining vs. Evolution Mining | MetalsGrove Mining vs. Bluescope Steel | MetalsGrove Mining vs. Sandfire Resources NL |
| Kip McGrath vs. National Australia Bank | Kip McGrath vs. National Australia Bank | Kip McGrath vs. Westpac Banking | Kip McGrath vs. National Australia Bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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